financetom
Economy
financetom
/
Economy
/
Fed's Jefferson sees risks to both employment, inflation
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
Fed's Jefferson sees risks to both employment, inflation
Apr 7, 2026 3:13 PM

April 7 (Reuters) - Federal Reserve Vice Chair Philip Jefferson on Tuesday reiterated his view that short-term borrowing costs are set appropriately to allow the central bank to respond as needed to the uncertain effects of rising energy prices and the conflict in the Middle East on the Fed's two mandates of price stability and full employment.

"In the current environment, I confront an outlook in which there is downside risk to the labor market and upside risk to inflation," he said in remarks prepared for delivery at the University of Detroit Mercy. "I remain cautious about my outlook.... I continue, however, to see our current policy stance as appropriately positioned to allow us to assess how the economy evolves."

Last month, Fed policy makers left the policy rate on hold in the 3.50%-3.75% range and signaled a desire to see more progress on inflation before cutting interest rates any further.

Jefferson, like many of his colleagues, said he feels the labor market is roughly in balance, though vulnerable to adverse shocks because businesses are already reluctant to hire.

A sufficiently large negative shock, he said, could slow job gains and drive up the unemployment rate, now at 4.3%.

Meanwhile, again like many of his colleagues, he noted his concern that inflation remains above the Fed's 2% target. While he had expected inflation to ease later this year as the effect of last year's tariff shock recedes, he now expects it to rise, at least in the short term, because of the oil shock. 

The current monetary policy setting should continue to support the labor market while allowing inflation to resume its decline, he said.

And while higher energy prices pose upside risks to his inflation forecast even as he worries they could weigh on consumer and business spending if they persist, he said, "I am confident that our current policy stance is well-positioned to respond to a range of outcomes."

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
US Congress scrambles to pass $1.2 trillion spending bill, midnight deadline looms
US Congress scrambles to pass $1.2 trillion spending bill, midnight deadline looms
Mar 22, 2024
WASHINGTON (Reuters) - The Republican-controlled U.S. House of Representatives and Democratic-majority Senate on Friday will scramble to beat a midnight government shutdown deadline by passing a $1.2 trillion bill keeping the government funded through September. If they succeed, it will end a more-than-six-month battle over the scope of Washington's spending for the fiscal year that began Oct. 1. If they...
U.S. companies' stock purchases via buybacks, M&A to hit 6-year high in 2024, Goldman says
U.S. companies' stock purchases via buybacks, M&A to hit 6-year high in 2024, Goldman says
Mar 22, 2024
(Reuters) - U.S. companies' purchases of domestic equities through more stock buybacks and corporate acquisitions will hit a six-year high of $625 billion this year, about as much as mutual funds and pension houses will offload, Goldman Sachs said. A surge in share buybacks and continued growth in cash mergers and acquisitions (M&A) will be the primary drivers of corporate...
US Dollar Improves Early Friday Ahead of Fed Appearances, State Unemployment
US Dollar Improves Early Friday Ahead of Fed Appearances, State Unemployment
Mar 22, 2024
07:38 AM EDT, 03/22/2024 (MT Newswires) -- The US dollar rose against its major trading partners early Friday, except for a decline versus the yen, ahead of a series of appearances by Federal Reserve officials that compensate for a lack of major US data. Fed Chairman Jerome Powell is scheduled to make opening remarks at a Fed Listens conference at...
Fed Chair Powell says pandemic has had lasting effects on economy
Fed Chair Powell says pandemic has had lasting effects on economy
Mar 22, 2024
(Reuters) - Federal Reserve Chair Jerome Powell on Friday opened a Fed Listens event on how Americans are experiencing the economy, saying the pandemic has had lasting effects and that to make good policy the U.S. central bank cannot rely only on macroeconomic data but needs to hear directly from people and businesses. He did not make any remarks about the...
Copyright 2023-2026 - www.financetom.com All Rights Reserved